10th Circuit Stays District Court Injunction of
Implementation of Do Not Call Registry

10/7. The U.S.
Court of Appeals (10thCir) issued an
order [24 pages in
PDF] staying the September 25 order of the U.S. District Court (DColo)
that barred the Federal Trade Commission (FTC)
from implementing its national
telemarketing do not call registry. The FTC and FCC may now proceed to implement
and enforce their rules pertaining to the do not call registry.

While this order issues a stay only, and at least nominally, does not address
the merits of the appeal, to find cause for issuing the stay, the Appeals Court first had
to find the FTC had demonstrated a substantial likelihood of success on the
merits. That is, the Appeals Court found that there is a substantial likelihood
that the District Court erred in its constitutional analysis. This may foretell
how the Court of Appeals will ultimately rule on the merits.

On September 25, the District Court in Denver, Colorado issued its
Memorandum Opinion
and Order [34 pages in PDF] holding that FTC's do not call registry violates
the First Amendment free speech rights of telemarketers.

The District Court case is Mainstream Marketing Service, TMG Marketing Inc., and American
Teleservices Association v. Federal Trade Commission, et al., D.C. No.
03-N-0184, U.S. District Court for the District of Colorado, Judge Edward
Nottingham presiding.

The Appeals Court wrote that "To obtain a stay under these rules, the FTC must address the
following factors: (1) the likelihood of success on appeal; (2) the threat of
irreparable harm if the stay or injunction is not granted; (3) the absence of
harm to opposing parties if the stay or injunction is granted; and (4) any risk
of harm to the public interest."

With respect to likelihood of success on the merits, the Court
wrote that "Regulation of such commercial speech passes constitutional
muster if (1) the government asserts a substantial interest to be achieved by
the restrictions; (2) the restriction directly advances that governmental
interest; and (3) the restriction is narrowly tailored to meet that interest."
The Appeals Court, like the District Court, cited the Supreme Court case of
Central Hudson Gas & Electric Corp. v. Public Service Commission of New York,
447 U.S. 557 (1980) as the controlling precedent.

The Appeals Court applied Central Hudson to the facts of
this case and concluded that "there is a substantial likelihood that the FTC will
be able to show a reasonable fit between the substantial governmental interests
it asserted and the national do-not-call list or, in other words, that the list
directly advances the government’s substantial interests and is narrowly
tailored." And consequently, the Appeals Court found that "After reviewing
the record and the parties’ submissions, we are satisfied the FTC has met its burden."

The Appeals Court opinion also contains the following order. "We ORDER the
district court’s permanent injunction preventing
implementation of the FTC’s national do-not-call list stayed pending final
resolution of this appeal on the merits. We further ORDER that the petition for
review on the merits be expedited. The FTC shall file its opening brief on
October 17. Mainstream Marketing shall file its responsive brief on October 31.
The FTC shall file any reply on November 7. Oral argument will be held in Tulsa,
Oklahoma, on November 10, 2003."

FTC Chairman Timothy Muris issued a
statement: "I am
heartened that the court of appeals has granted our
request to stay the order of the U.S. District Court for the District of
Colorado enjoining enforcement of the FTC's Do-Not-Call Rule. This is an important
victory for American consumers. We
believe the Rule fully satisfies the requirements of the U.S. Constitution, and
we will now proceed to implement and enforce the Do Not Call Registry."

FCC Chairman Michael Powell
stated in a
release [PDF] that "We're pleased that the FTC will now be
allowed to move forward with their Do Not Call registry. The ability to
cooperate with the FTC will make our enforcement efforts more efficient and more
effective. This means better protection from unwanted calls for the tens of
millions of Americans who asked not to be bothered."

Rep. Billy Tauzin (R-LA), the
Chairman of the House Commerce
Committee also issued a
release.
He stated that "This decision is great news for consumers and families. In
effect it says ‘hello’ to common sense. Finally, a federal court has recognized
that Americans have a right to say ‘goodbye’ to unwanted calls from pesky
telemarketers. I’m confident that the constitutionality of the do-not-call
registry will ultimately be upheld by the courts."

President Bush also released a
statement: "Today's decision by the U.S. Court of Appeals for the 10th
Circuit to allow the FTC to enforce the Do Not Call Registry is a victory for
Americans who want to reduce the nuisance of unwanted telephone solicitations.
The American people have the right to limit annoying telemarketing calls, and I
am pleased that both the Federal Trade Commission and the Federal Communications
Commission will now be able to ensure that Americans have that choice while the
courts continue to consider the issues."

The FCC adopted this item on May 15, 2003, but did not release
it until October 7, 2003, almost five months later. See,
TLJ story
titled "FCC Adopts Order Allowing Some Secondary Leasing of Spectrum", May 15,
2003. This is FCC 03-113 in WT Docket No. 00-230.

The FCC also announced deadlines for comments. Initial comments
are due by December 5, 2003. Reply comments are due by January 5, 2004.

This R&O and FNPRM also builds upon the work of the FCC's
Spectrum Policy Task Force (SPTF), which
Chairman Powell formed in June of 2002. The SPTF solicited comments and held
hearings, outside of the context of WT Docket No. 00-230, or any other rule
making proceeding. See, story titled "Powell Creates Task Force to Conduct
Spectrum Inquiry" in
TLJ Daily E-Mail
Alert No. 446, June 7, 2002. The FCC announced the completion of a SPTF
report on November 7, 2002. See, story titled "FCC Announces Report on Spectrum
Policy" in TLJ
Daily E-Mail Alert No. 545, November 8, 2002. The SPTF released this
Report [73 pages in PDF] on November 15, 2002. One of the many topics
addressed by the report is moving towards markets for spectrum. The report
recommends that "spectrum policy must evolve towards more flexible and market
oriented regulatory models."

This item states that "we revise the Commission’s de facto control
standard for interpreting Section 310(d) requirements in the context of spectrum
leasing, replacing the outdated Intermountain Microwave standard that
has been in place since 1963 with a refined standard that better accords with
our contemporary market-oriented spectrum policies, fast-changing consumer demands,
and technological advances." (Intermountain Microwave is published at 12 FCC
2d 559 (1963).)

It further states that "we implement two different options for spectrum leasing.
One option enables licensees and ``spectrum lessees´´ to enter into leasing arrangements,
without the need for Commission approval, so long as the licensee retains de facto
control of the leased spectrum under the newly refined standard. The other option
permits parties to enter into arrangements in which the licensee transfers de facto
control to the lessee pursuant to streamlined approval procedures.

This item also includes a further notice of proposed rule making. It states that
"we seek comment on how to encourage the development of information and clearinghouse
mechanisms that will facilitate secondary market transactions between licensees and new
users in need of access to spectrum. We also seek comment on further streamlining of
application processing for leasing, transfers, and assignments, expanding leasing to
additional services not covered by today’s order, and modifying or eliminating other
regulatory barriers impeding secondary market transactions."

The item further comments that "The Commission’s objectives in ``managing´´
spectrum usage have significantly evolved in recent years in response to statutory,
technological, and marketplace changes. We are increasingly seeking to ensure that
spectrum is put to its highest valued use, which generally can be most efficiently
determined by operation of market forces. In pursuit of that goal, the Commission has
increasingly granted flexibility to its licensees to enable them to put spectrum to its
highest and best uses, consistent with preventing unacceptable interference."

"Innovative technological changes and substantially increased demand have
reinforced the need for the Commission to revisit its traditional approaches. It is
in this vein that the Report and Order and the Further Notice posit an end
goal of an overall spectrum policy under which licensees have much greater ability
and incentive to make unused spectrum -- whether by frequency bandwidth, geographic
area, or time (or any combination thereof) -- available to third parties. These parties
may be current spectrum operators requiring additional spectrum to meet customer needs
over either the short- or long-term, new entrants seeking to serve a limited area or
narrowly targeted end-user market, small businesses trying to deliver services in rural
communities, diverse entities unable or unwilling to participate in spectrum auctions or
that otherwise do not have a license through which they can access spectrum to meet
consumer needs, or innovative spectrum users seeking to provide services by means of
opportunistic spectrum devices." (Parentheses in original.)

Finally, perhaps it is noteworthy that the first sentence of the first
paragraph of this R&O and FNPRM uses the phrase "spectrum usage rights".
Heretofore, the FCC has used the word "rights" sparingly in the context of
spectrum. Still, the R&O and FNPRM does not refer to U.S. "property rights" in
spectrum. Although, FCC Commissioner
Kathleen Abernathy
wrote in her concurring statement that "We must have an effective and legally
defensible secondary market if the property-like rights driven license model for
spectrum-based services is to succeed."

GAO Reports on Distance Learning at Minority
Serving Institutions

10/6. The General Accounting Office (GAO)
released a report [PDF]
titled "Distance Education: More Data Could Improve Education's Ability to Track
Technology at Minority Serving Institutions". The GAO surveyed three categories
of Minority Serving Institutions (MSIs), Historically Black Colleges, Hispanic
Serving Institutions, and Tribal Colleges, and found differences. It is the
Tribal Colleges, which are located mostly in the upper midwest and western
states, that have the most interest in offering distance learning courses. And,
they face technological obstacles.

The report found that MSIs "take into account two key factors in
deciding whether to offer distance education,". First, there is "their preferred
teaching method. About half of Historically Black Colleges and Universities that
currently do not offer distance education to undergraduates indicated that a
primary reason for not offering distance education was that they prefer teaching
in the classroom."

Second, there is "limited resources for
technology". The report found that some MSIs "said they wanted to offer more
distance education but had limited technology to do so. For example, officials
from the 10 Tribal Colleges that do not offer any distance education indicated
that improvements in technology would be helpful."

The report also states that "from a broader context, Minority
Serving Institutions reported that they view distance education as just one of
many goals for technology -- with varying degrees of priority depending on the
college. In response to our survey, officials from Historically Black Colleges
and Universities and Hispanic Serving Institutions more frequently indicated,
for example, that relative to goals such as increasing the use of technology in
the classroom, distance education ranks lower. At these schools, training
faculty in the use of technology and improving the use of information technology
in the classroom are higher priorities than distance education. By contrast,
officials at Tribal Colleges more frequently placed distance education as a
higher priority, reflecting their struggle to provide educational opportunities
to populations across large geographic areas."

There are two bills pending in the Congress that would authorize
the appropriation of funding for a grant program to provide technology for MSIs
for, among other things, distance learning.

Second, there is
HR 2183,
the "Minority Serving Institution Digital and Wireless Technology Opportunity
Act", which was introduced on May 21, 2003 by
Rep. Randy Forbes (R-VA). The House
Science Committee has held a hearing on the bill. See, stories titled "Rep.
Forbes Introduces Bill to Provide Grants for Digital and Wireless Technology for
MSIs" in TLJ Daily
E-Mail Alert No. 669, May 29, 2003; and "House Science Committee Holds
Hearing on MSI Tech Grant Bill" in
TLJ Daily E-Mail
Alert No. 695, July 10, 2003.

There is also
HR 3039,
the "Expanding Opportunities in Higher Education Act of 2003", which was
introduced by Rep. Tom Cole (R-OK) on
September 9, 2003. This bill would amend the Higher Education Act to allow MSIs
to use a portion of their funds to expand internet capabilities and other
distance learning capabilities.

He wrote that "there are multiple reports stating that China is
failing to fulfill its WTO obligations, including: in its use of insufficient
regulatory transparency; by utilizing unreasonable standards for agricultural
biotech products; in its application of agricultural and industrial quotas and
tariff-rate quotas (TRQs); through its use of export subsidies; by utilizing
discriminatory tax policies on imports; by failing to provide protection for
U.S. intellectual property rights; and, in maintaining high capital requirements
for establishing service businesses. It is time to take more action."

Sen. Grassley
(at right) continued that "although China has good
intellectual property rights (IPR) laws on its books, it is sorely lacking in
enforcement and coordination. U.S. businesses continue to experience significant
IPR problems in China that cost them billions of dollars each year in lost
sales. It is estimated that counterfeits account for 15 to 20 percent of all
products made in China. Chinese factories violating copyright, trademark, and
patent laws are not being shut down and violators are not being prosecuted.
China should make an example of these offenders through stiffer penalties and by
imposing prison sentences. This could go a long way toward slowing down the
illegal trade."

With respect to transparency, he wrote that "certain Chinese
agencies are selectively choosing who they will bring in for consultations on
rule-making issues, are providing short and ineffective comment periods for new
regulations, and are making their final decisions in a black box."

He added that "Nontransparent actions by government agencies and
high capitalization requirements are keeping U.S. service providers out of the
market."

Wednesday, October 8

The House will meet at 10:00 AM for legislative business. The House will
consider several items under suspension of the rules, including
HR 3159,
the "Government Network Security Act of 2003". This bill, which is
sponsored by Rep. Henry Waxman
(D-CA), Rep. Tom Davis (R-VA),
and others, would require federal government agencies to develop and implement
plans to protect the security and privacy of government computer systems from
the risks posed by peer-to-peer file sharing. See, story titled "House
Committee Passes Bill to Restrict P2P File Sharing on Computers and Networks
of Federal Agencies" in TLJ Daily E-Mail Alert No. 749, September 30, 2003,
See, Republican Whip
Notice.

The Supreme Court will hear
oral argument in Verizon v. Law Offices of Curtis Trinko, No. 02-682.
This is a case involving the application of Section 2 of the Sherman Antitrust
Act, 15 U.S.C. § 2,
in the context of telecommunications. See,
TLJ story
titled "Supreme Court Grants Certiorari in Verizon v. Trinko", March 10, 2003.

10:00 AM. The Senate
Banking Committee will consider several nominations
including Harvey Rosen and Kristin Forbes
to be members of the Council of Economic Advisers, Julie Myers and
Peter Lichtenbaum to be Assistant Secretaries of Commerce for Export
Enforcement. The Committee will then hold a hearing on the renominations of Roger Ferguson
to be Vice Chairman of the Board of Governors of the Federal Reserve System,
and Ben Bernanke
to be a member of the Board of Governors. See,
notice. Location: Room 538, Dirksen
Building.

2:00 - 4:00 PM. The Department
of Homeland Security's (DHS) National Infrastructure Advisory Council (NIAC) will
meet telephonically. The agenda provides that the NIAC will receive the findings
and propose recommendations developed by its working groups on Cross Sector
Interdependencies and Risk Assessment Guidance and Regulatory Guidance, and
receive status briefings on the continuing activities of its working groups on
Vulnerability Disclosure Guidelines and the Evaluation and Enhancement of
Information Sharing and Analysis. The NIAC is also accepting written comments.
To listen only, call 1-877-888-4034. See,
notice in the Federal Register, October 7, 2003, Vol. 68, No. 194, at Page
57914.

Deadline to submit comments to the
LOCAL Television Loan Guarantee Board's regarding the information and
recordkeeping requirements of the proposed regulation to implement the LOCAL
Television Loan Guarantee Program, as authorized by the Launching Our
Communities' Access to Local (LOCAL) Television Act of 2000. The purpose of
the Act is to facilitate access to signals of local TV stations in nonserved
areas and underserved areas. The Act establishes a LOCAL Television Loan
Guarantee Board to approve guarantees of up to 80% of loans totaling no more
than $1.25 Billion. The regulation proposes to establish eligibility and
guarantee requirements, the application and approval process, the
administration of guarantees, and the process through which the Board will
consider applications under the priority considerations required in the Act.
See,
notice in the Federal Register, August 15, 2003, Vol. 68, No. 158, at Pages
48814 - 48833. See also, Treasury
release.

10/7. The House Judiciary Committee's
Subcommittee on Courts, the Internet, and Intellectual Property postponed its meeting,
scheduled for 5:00 PM on Tuesday, October 7. It had been scheduled to continue its mark up of
HR 2517,
the "Piracy Deterrence and Education Act of 2003". The Subcommittee began
this markup on Thursday, October 2.

10/7. The House approved
HR 1303,
a bill to amend the E-Government Act of 2002 with respect to rulemaking
authority of the Judicial Conference, by a voice vote.

10/7. Microsoft and
Sun Microsystems announced an agreement under which
Microsoft will extend its support for the Microsoft Java Virtual Machine (MSJVM)
until September 30, 2004. See, Microsoft
release and Sun
release.

10/7. The Copyright Office (CO)
published a
notice in the Federal Register announcing that it is "making a
non-substantive technical amendment to its final regulations adjusting the
royalty rates and terms under the Copyright Act for the statutory license for
the use of sound recordings by preexisting subscription services for the period
January 1, 2002, through December 31, 2007." See, Federal Register, October 7,
2003, Vol. 68, No. 194, at Pages 57814 - 57815.

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